Silver prices will go crazy as demand overwhelms supply: Embry

John Embry, chief investment strategist with Sprott Asset Management, believes silver prices will go “ballistic” as demand massively outpaces supply while investor demand builds due to dwindling above-ground sources.

Speaking to King World News Embry notes that over the past half century billions of ounces in above ground silver have been consumed, with the precious metal serving as both as investment holding and key industrial material.

According to Embry demand far exceeds the amount of silver coming out of the ground or silver being recycled, and prices are set to go “crazy” as the skewed supply-demand relationship unfolds.

Although Embry remains immensely optimistic about gold and foresees a raging bull market in both gold and silver, he also expects the gold-silver ratio to decline as is typical during strong periods for precious metals.

Embry had this to say about gold and silver: “In the past year I didn’t think they could hold the gold price as successfully as they did. I mean gold is up this year. It’s probably going to be up 6% or 7%, but the fact is I would have expected far more than that based on what has unfolded in both the financial and the economic world.

So I think what we’ve built up is just a pent-up demand and a great looking chart. This is going to be supportive of a huge move. I really believe that 2013 will be the year it starts to break away. I have no problem with these high numbers that are being thrown around. I was watching an interesting interview the other day with James Turk, who I have enormous respect for, and he had called for $8,000 by 2015 back in 2003. He was just reiterating his point of view.

I just don’t think most people have any idea of how far something like this can go once it gains momentum. I remember when I was bullish on the stock market a long time ago and it (the Dow) had been trading under 1,000 for 16 years. I thought 3,000 was a real bold call, and it went to (roughly) 12,000.

So I’m extraordinarily bullish on the upside potential for gold, and I’m even more bullish for the upside potential for silver because in the event that we have a raging bull market in precious metals, the gold/silver ratio is going to fall like it always does during bull markets for precious metals.

I believe it (silver) will go ballistic. As you know, Eric Sprott and I have been extremely bullish on silver and we remain extremely bullish. One of the reasons is that over the past 50 years, billions of above ground ounces of silver have been consumed.

So by definition, there is far more demand than there is silver coming out of the ground and silver being recovered from scrap. So the rubber is going to meet the road if Nick Laird’s number (for above ground silver) is anywhere close to being real, and I think it is.

Eventually the demand is just going to overwhelm the supply and that’s when the price will go crazy. So these much higher price projections for silver, you can see them from what’s unfolding in the supply/demand equation